5 ways to sink your money
27 July 2016
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On mobile, on digital, on demand, this is Old Mutual Live, the Money Coach edition. Hello and welcome, my name is Chris Gibbons. With me in the Old Mutual Live studio is John Manyike, Head of Financial Education at Old Mutual. John welcome, good to have you with us.
John Manyike: Thank you for having me.
CG: There’s a fat chance most of us make enough money to get by on. Not necessarily enough to buy a new sports car. but enough to survive. Yet how many of us don’t even get to the end of the month before we find ourselves in trouble. It seems to happen again and again and again, despite our best intentions. Could we be making the same mistakes over and over again?
Well, in this edition of Old Mutual Live Money Coach, we’re going to try something different, it’s called ‘reverse psychology.’ We’re going to be looking at five ways to sink your money. John, first off, what do we mean by ‘reverse psychology?’
JM: Reverse psychology is a technique that involves the advocacy of a behavior that is opposite to the desire one, with the expectation that it will encourage a person to actually do the right thing. Generally, people just want to do the wrong thing. We’re tempted to actually do the wrong thing.
CG: If I say to somebody, don’t do it, don’t spend your money like that, they tend to do the reverse?
JM: Think of children. When children grow up, you say: Don’t touch that. They’re curious, they’re inquisitive, they want to see what is it. But you say: Touch it, then you will see and then all of a sudden you get a different behavior.
Where do I start blowing money?
CG: All right, let’s try it, I want to sink my money, how do I do it?
JM: That will be interesting. Number one, if you want to sink your money, is to live a life of borrowing. Just borrow, borrow, borrow and you don’t have to pay back the money. Borrow money for basic stuff, borrow money for food. Use your credit card to buy food and continue paying it long after the food is gone somewhere – we won’t say where! Also, you can have more than one credit card and move money from one credit card to the other, give new meaning to borrow from Peter to pay Paul.
CG: This sounds like an excellent plan, what’s next?
JM: The second one is, buy the most expensive car, even if you can’t afford it. You can even order it way before it comes into the country. After all, you’ve got balloon, this residual facility that people get on their loan, even if you can’t afford it.
CG: The next one?
JM: The third one is dress to kill. You know when they say dress to kill, dress to impress, show off. Show people the new brands and go for the boots that are worth R5 000, show people that you dress to kill.
It’s starting to sound like a Dr. Seuss book
CG: That’s three, number four?
JM: Number four, don’t buy property, even if you can afford it. Rent all your life because if you keep renting and renting and you’re not buying, you’re actually help somebody accumulate wealth. Because whatever your payments, your rental, you’re actually not acquiring that property.
CG: I’m making my landlord rich, I’m not making me rich.
CG: And number five?
JM: Number five, try the latest gadgets, the latest technology. If there’s a new flat screen TV, be the first one, be a trendsetter. Be the first one to get the new, latest phone. Anything that’s new, people must hear it from you that no, you are the man.
Recapping how to sink your money
CG: Five ways to sink your money, just recap them for me?
JM: One, live a life of borrowing. Two, buy the most expensive car, even if you can’t afford it. I mean these cars can cost up to half a million. Three, dress to kill, to impress. Four, don’t buy property, even if you can afford it. Rent all your life. Five, try the latest gadgets, buy the latest technology. Whether it’s cellphones, whether it’s a flat screen TV and so on. Let you be the trendsetter.
CG: Okay John, I’m off to sink my money, but remember, if you want to create wealth, you need to do just the opposite. I’ll be poor, but you’ll be rich. This has been another edition of Old Mutual Live, the Money Coach edition, my name is Chris Gibbons. With me in the Money Coach studio has been John Manyike, Head of Financial Education at Old Mutual. John, if the listeners want more information, where would they go?
JM: They can join our digital community on Facebook, that would be On the Money Financial Education Programme. Like our page there or follow us on Twitter @OM_OnTheMoney.
CG: Get in touch, any time, if you have any questions for either John or me or topics you’d like us to cover on Old Mutual Live Money Coach. Please feel free to send them direct to me at firstname.lastname@example.org, we’d be delighted to hear from you. Old Mutual Live, on mobile, on digital, on demand.